The International Health, Racquet & Sportsclub Association is the fitness industry's only global trade association representing over 10,000 for profit health and fitness facilities and over 600 supplier companies in 75 countries.

 

 



From educational tools and events to promotional programs and public policy initiatives, IHRSA brings you success... by association!

Join | Renew
Pledge Your Support

 
Search IHRSA Blog

Welcome to the IHRSA Blog

The Online Home of IHRSA.org news.

Blog Home |  Subscribe to our RSS Feed

Monday
Jul202009

Average Cost of Selling a Membership

Q: "What is the average cost of selling a membership to a fitness facility, factoring in advertising costs, sales staff, and number of members?"

A: Sales staffing and commissions are usually in the $75-$150 range per new member. $100-$125 is common with higher priced clubs.

Direct marketing costs (not including marketing personnel) are usually in the $75-$150 range as well. $100-$125 is also a common direct marketing cost with higher priced clubs.

If you have a marketing staff you would take that number and divide by your sales number to determine the full marketing expense load. My estimate is that it would add $10-$50 per sale depending on your marketing team payroll and head count.

All in, you can be at $200-$250 per sale in expenses for a premium priced club membership. This would be anywhere from 2-3 month of member tenure to break-even on acquisition costs. Retention has a much higher ROI.

Bill McBride, Chief Operating Officer
Club One
bill.mcbride@clubone.com

www.clubone.com
 

A: In this challenging economy, it is vital that you closely watch costs, reduce expenses, and according to business experts outside our industry, do not reduce marketing because everyone else will, or do not reduce sales training. You need to sharpen the saw as you will have less leads now than you did one year ago or do not diminish customer touch. The members will become more demanding and less tolerant of challenges/problems.

The simplest way to enable a small business owner to make better decisions, implement better, and get the necessary support to take action or follow through during tough times is to have a group of peers who are other CEOs.

The average REX Roundtable member has a cost of sales between $170 and $300. Keep in mind that a more expensive club may have a higher acquisition cost that profitably fits in their budget.

REX Roundtables has more than 90 club organizations (totaling over 500 clubs) that submit and share actual data three times a year. Many IHRSA past and present Board members and Presidents, including the current one are members of the REX Roundtables.

Eddie Tock, Partner
REX Roundtables for Executives™ Licensee
281-732-9757
eddie@eddietock.com
www.rexonline.org

A: The question posted in part answers itself. The formula of advertising costs + sales staff costs / # of members highlights just some of the variables that come into play.

Here are some other variables to consider:

  1. How many leads does the club get?
  2. How does the club do on lead conversion?
  3. How much is spent in TOTAL on advertising and marketing.*

* When figuring the total cost of advertising and marketing, be sure to include the following:

  • Direct advertising costs
  • Signage and billboards
  • Internal branding and uniforms
  • Brochures and fliers;
  • Web site creation/support;
  • Phone line/call costs
  • Sales staff wages, commissions, taxes, etc...
  • Approx 10% of front desk costs
  • Your new member integration program. A vital service new members look for and should be budgeted into every new sale. If you don’t have one, it’s costing you sales. (more information on this topic can be found at www.face2faceretention.com)

CLUB X has 2500 members and loses 1000 members through attrition. It sells 1200 new memberships annually from 2000 inquiries. Annual revenues near $3m and the clubs spends 5% or $150,000 annually on direct advertising and marketing and an additional 7% or $210,000 on the sales staffing and essential services to support each new membership. Therefore each inquiry costs $180 and each new sale cost $300. More importantly every time they skimp on essential services such as a proper new member integration program and systematized retention strategies, they will likely have to spend a further $300 to replace the lost member.

Going the extra mile to retaining a member at CLUB X with all costs factored in would equate to just $87 in year 1 and $46 annually thereafter. A wise an profitable investment.

Paul Brown, President
Face2Face Retention Systems
888/323-20107
paulb@face2faceretention.com
www.face2faceretention.com

Monday
Jul132009

Best Practices for Stretching in Water

"I just began teaching an aqua stretch class. On land the stretches should be held 20-30 seconds. It seems water everything is different - heart rate, impact, etc...

Q: "Is there different criteria for water stretches?"

A:There have been many studies conducted with flexibility in mind. The majority of land studies conclude that static stretches should be performed with warm muscles and held for 30 seconds to achieve the maximal benefit. This statement seems to be dependent on age (Younger (<39) 30 seconds, older (>65) 60 seconds).

There is also a great body of evidence that supports that total daily stretching time has more influence on improving flexibility than a single bout (ex: 10 second hamstring stretch performed 6 times per day).

As on land, stretching in the water should be performed after warming up the muscles. When determining stretching duration, the aquatic environment should be taken into account. If you are performing stretches in a cooler body of water, a shorter static stretch followed by dynamic exercises should be performed to assist in maintaining muscle temperature. In a warmer pool, maintenance of muscle temperature will not pose as much of a challenge and thus stretches can be longer in duration and without interruption.

The aquatic environment provides unique properties to assist in increasing range of motion. Learning how to utilize this environment will assist in providing depth to any aquatic class.

Lori A. Sherlock, Research Committee Co-Chair
Aquatic Exercise Association, Inc.
941/486-8600
www.aeawave.com

References:
1. Bandy, W.D., Irion, J.M., & Briggler, M. (1997). The effect of time and frequency of static stretching on flexibility of the hamstring muscles. Physical Therapy, 77, 1090-1096
2. Cipriani, D., Abel, B., & Pirrwitz, D. (2003). A comparison of two stretching protocols on hip range of motion: implications for total daily stretch duration. Journal of Strength and Conditioning Research, 17, 274-278
3. Feland, J.B., Myrer, J.W., Schulthies, S.S., Fellingham, G.W., & Measom, G.W. (2001). The effect of duration of stretching of the hamstring muscle group for increasing range of motion in people aged 65 years or older. Physical Therapy, 81, 1110-1117

Monday
Jul062009

Ideal Temperature for Water Aerobics

Q: "What is ideal temperature for water aerobics?"

A: That’s a tough one. Water temperature is a lot like music, everyone has their personal preferences.

It is hard to please both the hardcore lap swimmer who would prefer the water temp was 78-79 degrees and the senior member with arthritis who would like to get into 86-88 degree water.

Unless you have the luxury of a dedicated warm water therapy pool, you would normally split the difference and keep the temp as close to 81 degrees as possible. Water aerobics participants can generally begin moving quickly enough to overcome the initial jolt to their system and get their heart rate pumping sufficiently to adjust to 81 degree water.

Bob Shoulders, Owner
Fayetteville Athletic Club
bshoulders@fayac.com
www.fayac.com

A: According to the American College of Sports Medicine - “Health / Fitness Facility Standards and Guidelines” (second edition), the appropriate temperature for fitness facility pools is between 78 and 86 degrees Fahrenheit.

Experience suggest that most “lap swimmers” prefer 78 – 80 degrees, most “aqua aerobics participants” prefer 81 – 83 degrees, and most “aqua therapy / rehabilitation clients” prefer 84 – 86 degrees. These ranges work great of course if you have specific pools for each purpose. If not, as is the case with most health clubs, a compromise of 80 – 82 seems to work best.

Brent Darden, Owner
TELOS Fitness Center
bdarden@telosfitnesscenter.com
www.telosfitnesscenter.com

Monday
Jun292009

How to Price a Personal Training Business

Q: “I have been running my own personal training business for over a decade with many long-time, loyal clients. I am planning on moving out of the country soon and am considering selling my business. How can I price a business like this?" – Derek



A: The net worth of your business is equal to the net revenue generated from personal training sessions during the previous year.

It goes without saying that your marketing, wage, payroll and operating expenses have been subtracted from the gross procured to get to your net. Many will negotiate a price using numbers that reflect the expected net for 1+ 1/2 years rather than the year’s actual net, when business is as well established as yours, when the business has a branded program option attached, or when the business has a history of high renewal or resign.

Most believe that these figures can be seen as fictitious, though, and can often lead to concerns with breach of contract. Experts will recommend that a buyer sign an open ended contract so it is best not to address estimated numbers during the sales process.

Studies have shown that new owners may be in need of using your services as a consultant when buying. Establishing this relationship at the point of sales is often recommended.

Ann Gilbert, Reg. Dir. of P.T. & Operations
Shapes Total Fitness for Women
annfitt@verizon.net
www.shapestotalfitness.com

 

A: You may want to rethink simply selling your business. If you have a great accountant or business lawyer, talk to them about the advantages of keeping your business and/or perhaps partnering with someone. If it’s a thriving business, you could still bring in income as a “silent” partner.

Next, consider the following:

Are you the business? In other words, if you’ve built your business by branding yourself and your image as the business, someone may view that as a negative once you’re gone, (thus the advantage of keeping some ownership or all of it and having someone run it). It makes a business tougher to sell.

Take a look at the market demand and perhaps research what similar businesses are selling for in your area. This is something that again, your business expert can help you with.

There are dozens of areas to cover when it comes to selling a business. So my first suggestion is to connect with a solid business resource as I mentioned above, i.e., Accountant or business attorney. They will be able to walk you through the steps and give you an idea on what your business is worth, thus allowing you to make a more educated, profitable decision.

Nicki Anderson, President
Reality Fitness, Inc.
nicki@realityfitness.com
www.realityfitness.com

Monday
Jun222009

Increase Prices Without Killing Retention

Q: We solely rely on cash payment from customers owing to an absence of EFT direct debit system and also because this country is largely a cash based society. We have prepaid monthly membership, which means that the customer has the option every month to bail out of the contract if he seems a discrepancy between the price-value relationship. This, in turn, makes us work very hard in the sense that we're unable to estimate our attrition rates.
How does one determine the right time to increase prices and still uphold the value proposition for the customer?



A: It was not that long ago that the US health club industry felt that the public would not accept EFT payments for membership. We began offering lower dues to members who were willing to try the EFT billing system. Within a short period of time, the majority of members were selecting this option. We continued to offer the cash payment option at a premium price.

  I recommend that you get into a practice of increasing your dues once a year. Let members know they can expect to see an increase in dues, relative to increased costs, each year. You can explain that your club prefers not to solve these increased costs with staff or service reductions.

The best time to do a dues increase is in conjunction with your busiest sales season. In the US, this is typically January when clubs experience a high volume of new memberships as people make New Year's resolutions to take better care of themselves.

My suggestion is that you consider combining these two issues into one solution. I recommend that you revise your membership pricing structure. Increase the cost of your current cash payment membership offer and offer a new EFT membership at the current dues rate. Notify all of the existing members that you are imposing a dues increase but they can choose to avoid this increase if they sign up for EFT billing.

Jill Stevens Kinney, Managing Director
Clubsource Development Partners LLC
jill@clubsource.com
www.clubone.com

Page 1 ... 371 372 373 374 375